If you are a typical business owner, there’s a good chance you wake up at 2 am some mornings with an uneasy feeling – trying to crunch numbers in your head and get an accurate pulse of what’s going on in your business. But with out-of-date and tough-to-read data, things just aren’t adding up.
So you take the pulse based on your gut. But deep down, you know this isn’t going to get your business where you want it to be.
New Ecomony’s solution – formulate your data in a way that allows you to consistently and accurately take the pulse of your business so you can take effective action.
If this sounds good, read on.
Do You Have Business Goals?
Goals are defined as a desired result that you, or a group of people, plan and commit to achieving. Does your business have them? If not, you should.
Here are some of our best tips for setting goals for your business:
Get Your Team Involved
Your team is full of ideas and has an interest in the success of your business. Get them involved. Get their buy-in, and gather their thoughts and ideas. Lean into what they have to say and use it to help you build out your goals.
Think Through Your Priorities
Think of your top 1-3 priorities in your business that need to be focused on to move it forward. This may take some deep thought and serious evaluation, but it will be worth it.
- Where is your business now?
- What are you trying to accomplish?
- Where are you trying to go?
Your goals should help you accomplish your priorities.
Create SMART Goals
Following the SMART goals framework helps you build good goals.
Here’s what we mean:
- S – Specific
- Make your goals specific and narrow.
- M – Measurable
- Define how you will measure your success towards reaching the goal.
- A – Achievable
- You have to be able to accomplish your goal. Don’t set the bar too high.
- R – Relevant
- Make sure your goals align with your priorities.
- T – Time-based
- Set a realistic end date for reaching your goals.
Document Your Goals
Once you’ve built out your goals, document them.
Make them clear to your team.
Hold yourself accountable.
Having goals won’t do you any good if you are the only person who knows they exist.
What Does Your Data Look Like?
Financially speaking there are certain data components that can help to determine if you are on or off track. When you track the right data, you have the opportunity to make decisions to right the ship when things are off track.
Here’s what your data should look like:
Every Business Should Have a 1, 3, and 5-Year Financial Plan
A strong financial plan will be broken into 1-year, 3-year, and 5-year segments. You’ll be able to refer back to your financial plan to bring the business you want to life. Think of it as a roadmap.
You can break your financial plan down by month and measure it against actual financial results. This is the KEY. If something is off, you need to be able to gain an understanding as to why.
Assign ownership to an individual to get to the root cause and offer up suggestions to get things back on track.
By following along with your plan, you can also narrow down what resources are needed as you go, like:
As you build out your financial plan, use our top 4 financial tools to guide you.
Use a Weekly Scorecard
Every business should have a weekly scorecard. At New Economy, we believe a good Key Performance Indicator (KPI) in the form of a scorecard will help you manage data and provide you with a pulse of your business on a consistent basis. This will allow you to take prompt, effective action.
Here’s how you can create an effective scorecard:
- Identify and agree on the top 10 items to measure
- Make someone accountable for each measure
- Create goals for each measurable
- Make the measurable time sensitive
- Make someone accountable for getting the measurable and filling in the scorecard each week
- Use it
Each Team Member Should be in Charge of a Measurable
Keeping track of your measurables is essential, but the task shouldn’t just fall on one person’s shoulders. Give everyone on your team a number to keep track of. Doing this:
- Cuts through murkiness between manager and direct reports
- Create accountability
- Provides clarity and commitment
- Produces results (this is a big one as we are trying to use data to drive towards our goals)
For example, if you are a service-based company, you might measure revenue by employee, and each employee understands what is expected of them. If they achieve their measurable, which should be aligned with the business goals and overall measurables, then you have a high degree of alignment and can rest assured knowing team members rowing in the right direction.
Bring Your Data to Life, Achieve Your Goals
By having a Financial Model, Weekly Scorecard, and Individual Measurables, you are bringing to life the data road map which can be utilized to help you achieve your goals.
A few final thoughts to remember before you put the plan into action:
- Be open to learning. What is the data telling you?
- Dig deep. Is something off track? Get to the root cause.
- Apply what you have learned and get things back on track.
If you’re searching for a financial partner to help you use efficient data to reach your business goals, schedule a call with our Founder, Jeff! Our mission is to help entrepreneurs gain control of their finances so they can make smart decisions to build and grow their businesses, and we’d love to help you!